EX-99.1 2 c47322exv99w1.htm EX-99.1: PRESS RELEASE EX-99.1
Exhibit 99.1
Motorola Announces Third-Quarter Financial Results
  •   Third-quarter sales of $7.5 billion
 
  •   Positive operating cash flow of $180 million; total cash position of $7.6 billion
 
  •   Separation of the businesses targeted beyond 2009
 
  •   Implementing further cost reductions with an estimated annual savings of $800 million in 2009
 
  •   Mobile Devices sales of $3.1 billion; shipped 25.4 million handsets
 
  •   Home and Networks Mobility sales of $2.4 billion; operating earnings increased to $263 million, an increase of 65 percent compared to the third quarter of last year
 
  •   Enterprise Mobility Solutions sales of $2.0 billion; operating earnings increased to $403 million, an increase of 23 percent compared to the third quarter of last year
SCHAUMBURG, Ill. – October 30, 2008 – Motorola, Inc. (NYSE: MOT) today reported sales of $7.5 billion in the third quarter of 2008. The GAAP net loss from continuing operations in the third quarter of 2008 was $397 million, or a loss of $0.18 per share. This included net charges of $0.23 per share from highlighted items, which are outlined in the table at the end of this press release.
Greg Brown, Motorola’s co-chief executive officer and CEO of Broadband Mobility Solutions, said, “The company had positive operating cash flow of $180 million and ended the quarter with a total cash* position of $7.6 billion. Our balance sheet and liquidity position give us agility and flexibility in today’s weakened global economy and turbulent financial markets. In addition, we benefit from a global customer base and a broad portfolio of products and solutions that meet the needs of our customers.”
Brown added, “In the third quarter, we continued to expand operating margins in our Home and Networks Mobility and Enterprise Mobility Solutions segments. While we will continue to prioritize investments on opportunities for growth, we are also improving our cost structure across the company by implementing further cost reductions. The initiatives announced today, together with prior actions, will result in total estimated annual savings of $800 million in 2009.”
Sanjay Jha, Motorola’s co-chief executive officer and CEO of Mobile Devices, said, “While our strategic intent to separate the company remains intact, we are no longer targeting the third quarter of 2009, primarily due to the macro-economic environment, stresses in the financial markets and the changes underway in Mobile Devices. We have made progress on various elements of the separation plan and will continue to prepare for a potential transaction at the

 

 

appropriate timeframe that serves the best interests of the company and its shareholders.”
Jha added, “As part of our plan to rebuild Mobile Devices, we have announced significant actions to accelerate the consolidation of our product platforms and refocus our investment and market priorities. These efforts will result in a leaner organization with a more competitive and cost-effective product portfolio.”
Operating results
Mobile Devices segment sales were $3.1 billion, down 31 percent compared to the year-ago quarter. The segment reported an operating loss of $840 million, compared to an operating loss of $248 million in the year-ago quarter. The loss this quarter includes significant charges, primarily related to decisions and plans to consolidate silicon and software platforms and simplify the product portfolio.
Mobile Devices highlights:
  •   Shipped 25.4 million handsets and began shipping 16 new products to key markets, including three new 3G devices
 
  •   Launched Motorola KRAVE™ ZN4, which features two layers of touch — on an interactive clear flip outside and a full touch-screen inside
 
  •   Expanded our ROKR portfolio with three new music-optimized devices, the MOTOROKR EM30, MOTOROKR EM28 and MOTOROKR EM25
 
  •   Delivered several additional CDMA and companion products, including Motorola Rapture™ VU30, MOTO™ VU204 and MOTOPURE™ H15 Universal Bluetooth® Headset
 
  •   Announced AURA™, a high-tier mobile device with timeless, classic design
Home and Networks Mobility segment sales were $2.4 billion, down 1 percent compared to the year-ago quarter. Operating earnings increased to $263 million, which represents an increase of 65 percent, compared to operating earnings of $159 million in the year-ago quarter.
Home and Networks Mobility highlights:
  •   Expanded operating margin year-over-year from 7 percent of sales to 11 percent of sales
 
  •   Shipped 4.1 million digital entertainment devices, compared to 2.7 million in the year-ago quarter, due to continued strong demand for HD, HD/DVR and IPTV devices
 
  •   Signed multiple contracts worth $431 million with China Mobile Communications Corporation for its GSM network upgrades and expansion

 

 

  •   Announced the multimedia set-top platform and its first implementation with KDDI, an operator in Japan
 
  •   Won IPTV contract with Deutsche Telekom in Germany
Enterprise Mobility Solutions segment sales were $2.0 billion, up 4 percent compared to the year-ago quarter. Operating earnings increased to $403 million, which represents an increase of 23 percent, compared to operating earnings of $328 million in the year-ago quarter.
Enterprise Mobility Solutions highlights:
  •   Expanded operating margin year-over-year from 17 percent of sales to 20 percent of sales
 
  •   Continued to realize strong international demand in the government and public safety markets
 
  •   Launched APX™, the industry’s first Project 25 multi-band radio with multi-agency interoperability, dual-sided portable operation and integrated GPS
 
  •   Completed acquisition of AirDefense, a leading wireless LAN security provider, subsequent to the end of the quarter
 
  •   Signed a definitive agreement to sell the biometrics business to SAFRAN, subsequent to the end of the quarter
Fourth-quarter and full-year 2008 outlook
The company expects to report earnings from continuing operations in the range of $0.02 to $0.04 per share in the fourth quarter of 2008 and full year earnings per share in the range of $0.05 to $0.07. This outlook excludes any reorganization of business charges associated with the company’s operating expense reduction initiatives, as well as any other items of the variety highlighted by the company in its quarterly earnings releases.
Consolidated GAAP results
A comparison of results from operations is as follows:
                 
    Third Quarter
(In millions, except per share amounts)   2008   2007
Net sales
   $ 7,480     $ 8,811  
Gross margin
     1,803       2,505  
Operating loss
     (452 )     (10 )
Earnings (loss) from continuing operations
     (397 )     40  
Net earnings (loss)
     (397 )     60  
Diluted earnings (loss) per common share:
                
Continuing operations
   $ (0.18 )   $ 0.02  
Discontinued operations
     —       0.01  
     

 

 

                 
    Third Quarter
(In millions, except per share amounts)   2008   2007
 
   $ (0.18 )   $ 0.03  
     
Weighted average diluted common shares outstanding
     2,265.9       2,318.4  
     
Highlighted Items
         
    EPS Impact Exp/(Inc)  
Software and silicon platform consolidation charge
   $ (0.11 )
Settlement of Freescale purchase commitment
     (0.04 )
Impairment of Sigma Fund investments
     (0.05 )
Asset impairments
     (0.04 )
Reorganization of business charges
     (0.01 )
Separation-related transaction costs
     (0.01 )
Reversal of tax-related interest accruals
     0.01  
Gain on the sale of PP&E
     0.01  
Tax-related benefits
     0.01  
 
      
 
   $ (0.23 )
 
      
Conference call and webcast
Motorola will host its quarterly conference call beginning at 8 a.m., Eastern Time (USA) on Thursday, October 30, 2008. The conference call will be webcast live with audio and slides at www.motorola.com/investor.
Definitions
 
*   Total cash equals Cash and cash equivalents plus Sigma fund (current and non-current) plus Short-term investments
Business Risks
This press release contains “forward-looking statements” as that term is defined in the Private Securities Litigation Reform Act of 1995. Such forward-looking statements include, but are not limited to statements about: 1) cost savings from cost reduction actions; 2) the timeframe for our plans to separate the Company; and 3) Motorola’s financial outlook for the fourth quarter and full year of 2008. Motorola cautions the reader that the risk factors below, as well as those on pages 18 through 27 in Item 1A of Motorola’s 2007 Annual Report on Form 10-K and in its other SEC filings, could cause Motorola’s actual results to differ materially from those estimated or predicted in the forward-looking statements. Factors that may impact forward-looking statements include, but are not limited to: (1) the Company’s ability to improve financial performance and increase market share in its Mobile Devices business, particularly in light of anticipated slowing demand in the global handset market; (2) the level of demand for the Company’s products, particularly in light of global economic conditions which may lead consumers, businesses and governments to defer purchases in

 

 

response to tighter credit and negative financial news; (3) the Company’s ability to introduce new products and technologies in a timely manner; (4) the possible negative effects on the Company’s business operations, financial performance or assets as a result of its plan to create two independent, publicly traded companies; (5) unexpected negative consequences from the Company’s ongoing restructuring and cost-reduction activities, including as a result of significant restructuring at the Mobile Devices business; (6) negative impact on the Company’s business from the ongoing global financial crisis and severe tightening in the credit markets, which may include: (i) the inability of customers to obtain financing for purchases of the Company’s products; (ii) the viability of the Company’s suppliers that may no longer have access to necessary financing; (iii) reduced value of investments held by the Company’s pension plan and other defined benefit plans; (iv) fair and/or actual value of Company’s debt and equity investments could differ significantly from the fair values currently assigned to them, including as a result of additional impairments in the Company’s Sigma Fund; (v) counterparty failures negatively impacting the Company’s financial position; and (vi) increased cost to the Company to obtain financing; (7) the economic outlook for the telecommunications and broadband industries; (8) the Company’s ability to purchase sufficient materials, parts and components to meet customer demand, particularly in light of global economic conditions; (9) risks related to dependence on certain key suppliers; (10) the impact on the Company’s performance and financial results from strategic acquisitions or divestitures, including those that may occur in the future; (11) risks related to the Company’s high volume of manufacturing and sales in Asia; (12) the creditworthiness of the Company’s customers and distributors, particularly purchasers of large infrastructure systems; (13) variability in income received from licensing the Company’s intellectual property to others, as well as expenses incurred when the Company licenses intellectual property from others; (14) unexpected liabilities or expenses, including unfavorable outcomes to any pending or future litigation or regulatory or similar proceedings; (15) the impact of foreign currency fluctuations, including the negative impact of the strengthening U.S. dollar on the Company when competing for business in foreign markets; (16) the impact on the Company from continuing hostilities in countries where the Company does business; (17) the impact on the Company from ongoing consolidation in the telecommunications and broadband industries; (18) the impact of changes in governmental policies, laws or regulations; (19) the outcome of currently ongoing and future tax matters; and (20) negative consequences from the Company’s outsourcing of various activities, including certain manufacturing, information technology and administrative functions. Motorola undertakes no obligation to publicly update any forward-looking statement or risk factor, whether as a result of new information, future events or otherwise.
About Motorola
Motorola is known around the world for innovation in communications. The company develops technologies, products and services that make mobile

 

 

experiences possible. Our portfolio includes communications infrastructure, enterprise mobility solutions, digital set-tops, cable modems, mobile devices and Bluetooth accessories. Motorola is committed to delivering next generation communication solutions to people, businesses and governments. A Fortune 100 company with global presence and impact, Motorola had sales of US $36.6 billion in 2007. For more information about our company, our people and our innovations, please visit www.motorola.com.
# # #
Media contact:
Jennifer Erickson
Motorola, Inc.
+1 847-435-5320
jennifer.erickson@motorola.com
Investor contact:
Dean Lindroth
Motorola, Inc.
+1 847-576-6899
dean.lindroth@motorola.com

 

 

Motorola, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(In millions, except per share amounts)
                         
    Three Months Ended  
    September 27, 2008     June 28, 2008     September 29, 2007  
Net sales
   $ 7,480     $ 8,082     $ 8,811  
Costs of sales
     5,677       5,757       6,306  
 
                  
Gross margin
     1,803       2,325       2,505  
 
                  
 
                        
Selling, general and administrative expenses
     1,044       1,115       1,210  
Research and development expenditures
     999       1,048       1,100  
Separation-related transaction costs
     21       20       —  
Other charges
     111       56       115  
Intangibles amortization and IPR&D
     80       81       90  
 
                  
Operating earnings (loss)
     (452 )     5       (10 )
 
                  
 
                        
Other income (expense):
                        
Interest income (expense), net
     18       (10 )     7  
Gains on sales of investments and businesses, net
     7       39       5  
Other
     (173 )     (85 )     6  
 
                  
Total other income (expense)
     (148 )     (56 )     18  
 
                  
 
                        
Earnings (loss) from continuing operations before income taxes
     (600 )     (51 )     8  
 
                        
Income tax benefit
     (203 )     (55 )     (32 )
 
                  
Earnings (loss) from continuing operations
     (397 )     4       40  
 
                        
Earnings from discontinued operations, net of tax
     —       —       20  
 
                        
 
                  
Net earnings (loss)
   $ (397 )   $ 4     $ 60  
 
                  
 
                        
Earnings (loss) per common share
                        
Basic:
                        
Continuing operations
   $ (0.18 )   $ 0.00     $ 0.02  
Discontinued operations
     —       —       0.01  
 
                  
 
   $ (0.18 )   $ 0.00     $ 0.03  
 
                  
 
                        
Diluted:
                        
Continuing operations
   $ (0.18 )   $ 0.00     $ 0.02  
Discontinued operations
     —       —       0.01  
 
                  
 
   $ (0.18 )   $ 0.00     $ 0.03  
 
                  
 
                        
Weighted average common shares outstanding
                        
Basic
     2,265.9       2,262.6       2,290.2  
Diluted
     2,265.9       2,269.5       2,318.4  
 
                        
Dividends paid per share
   $ 0.05     $ 0.05     $ 0.05  
 
                  
 
                        
    Percentage of Net Sales*
     
Net sales
     100 %     100 %     100 %
Costs of sales
     75.9 %     71.2 %     71.6 %
 
                  
Gross margin
     24.1 %     28.8 %     28.4 %
 
                  
 
                        
Selling, general and administrative expenses
     14.0 %     13.8 %     13.7 %
Research and development expenditures
     13.4 %     13.0 %     12.5 %
Separation-related transaction costs
     0.3 %     0.2 %     0.0 %
Other charges
     1.5 %     0.7 %     1.3 %
Intangibles amortization and IPR&D
     1.1 %     1.0 %     1.0 %
 
                  
Operating earnings (loss)
     -6.0 %     0.1 %     -0.1 %
 
                  
 
                        
Other income (expense):
                        
Interest income (expense), net
     0.2 %     -0.1 %     0.1 %
Gains on sales of investments and businesses, net
     0.1 %     0.5 %     0.1 %
Other
     -2.3 %     -1.1 %     0.1 %
 
                  
Total other income (expense)
     -2.0 %     -0.7 %     0.2 %
 
                  
Earnings (loss) from continuing operations before income taxes
     -8.0 %     -0.6 %     0.1 %
Income tax benefit
     -2.7 %     -0.7 %     -0.4 %
 
                  
Earnings (loss) from continuing operations
     -5.3 %     0.0 %     0.5 %
 
                        
Earnings from discontinued operations, net of tax
     0.0 %     0.0 %     0.2 %
 
                        
 
                  
Net earnings (loss)
     -5.3 %     0.0 %     0.7 %
 
                  
 
*   Percents may not add up due to rounding

 

 

Motorola, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(In millions, except per share amounts)
                 
    Nine Months Ended  
    September 27, 2008     September 29, 2007  
Net sales
   $ 23,010     $ 26,976  
Costs of sales
     16,737       19,564  
 
            
Gross margin
     6,273       7,412  
 
            
 
                
Selling, general and administrative expenses
     3,342       3,819  
Research and development expenditures
     3,101       3,332  
Separation-related transaction costs
     41       —  
Other charges
     261       418  
Intangibles amortization and IPR&D
     244       377  
 
            
Operating loss
     (716 )     (534 )
 
            
 
                
Other income (expense):
                
Interest income, net
     6       80  
Gains on sales of investments and businesses, net
     65       9  
Other
     (267 )     22  
 
            
Total other income (expense)
     (196 )     111  
 
            
 
                
Loss from continuing operations before income taxes
     (912 )     (423 )
 
                
Income tax benefit
     (325 )     (207 )
 
            
Loss from continuing operations
     (587 )     (216 )
 
                
Earnings from discontinued operations, net of tax
     —       67  
 
                
 
            
Net loss
   $ (587 )   $ (149 )
 
            
 
                
Earnings (loss) per common share
                
Basic:
                
Continuing operations
   $ (0.26 )   $ (0.09 )
Discontinued operations
     —       0.03  
 
            
 
   $ (0.26 )   $ (0.06 )
 
            
 
                
Diluted:
                
Continuing operations
   $ (0.26 )   $ (0.09 )
Discontinued operations
     —       0.03  
 
            
 
   $ (0.26 )   $ (0.06 )
 
            
 
                
Weighted average common shares outstanding
                
Basic
     2,262.1       2,322.7  
Diluted
     2,262.1       2,322.7  
 
                
Dividends paid per share
   $ 0.15     $ 0.15  
 
            
 
                
    Percentage of Net Sales*
     
Net sales
     100 %     100 %
Costs of sales
     72.7 %     72.5 %
 
            
Gross margin
     27.3 %     27.5 %
 
            
 
                
Selling, general and administrative expenses
     14.5 %     14.2 %
Research and development expenditures
     13.5 %     12.4 %
Separation-related transaction costs
     0.2 %     0.0 %
Other charges
     1.1 %     1.5 %
Intangibles amortization and IPR&D
     1.1 %     1.4 %
 
            
Operating loss
     -3.1 %     -2.0 %
 
            
 
                
Other income (expense):
                
Interest income, net
     0.0 %     0.3 %
Gains on sales of investments and businesses, net
     0.3 %     0.0 %
Other
     -1.2 %     0.1 %
 
            
Total other income (expense)
     -0.9 %     0.4 %
 
            
Loss from continuing operations before income taxes
     -4.0 %     -1.6 %
Income tax benefit
     -1.4 %     -0.8 %
 
            
Loss from continuing operations
     -2.6 %     -0.8 %
 
                
Earnings from discontinued operations, net of tax
     0.0 %     0.2 %
 
                
 
            
Net loss
     -2.6 %     -0.6 %
 
            
 
*   Percents may not add up due to rounding

 

 

Motorola, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(In millions)
                         
    September 27,     June 28,     September 29,  
    2008     2008     2007  
Assets
                        
Cash and cash equivalents
   $ 2,974     $ 2,757     $ 2,315  
Sigma Fund
     3,427       3,856       5,021  
Short-term investments
     735       595       1,063  
Accounts receivable, net
     4,330       4,495       5,165  
Inventories, net
     2,649       2,758       2,995  
Deferred income taxes
     1,954       1,882       1,873  
Other current assets
     3,799       3,876       3,233  
 
                  
Total current assets
     19,868       20,219       21,665  
 
                  
 
                        
Property, plant and equipment, net
     2,505       2,575       2,536  
Sigma Fund
     483       555       —  
Investments
     715       746       951  
Deferred income taxes
     3,060       3,074       2,472  
Goodwill
     4,351       4,358       4,676  
Other assets
     2,137       2,212       2,469  
 
                  
Total assets
   $ 33,119     $ 33,739     $ 34,769  
 
                  
 
                        
Liabilities and Stockholders’ Equity
                        
Notes payable and current portion of long-term debt
   $ 189     $ 145     $ 1,523  
Accounts payable
     3,834       3,806       3,671  
Accrued liabilities
     7,850       7,623       7,707  
 
                  
Total current liabilities
     11,873       11,574       12,901  
 
                  
 
                        
Long-term debt
     3,988       3,971       2,628  
Other liabilities
     2,599       2,990       4,196  
 
                        
Stockholders’ equity
     14,659       15,204       15,044  
 
                  
 
                        
Total liabilities and stockholders’ equity
   $ 33,119     $ 33,739     $ 34,769  
 
                  
 
                        
Financial Ratios*:
                        
Days Sales Outstanding (including net Long-term receivables)
     53       50       53  
Cash Conversion Cycle1
     38       34       43  
ROIC
     3 %     3 %     7 %
Net Cash
   $ 3,442     $ 3,647     $ 4,248  
 
1   Excludes the excess inventory charge in the Mobile Devices segment.
 
*   Defined in the Financial Ratios Definitions table

 

 

Motorola, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(In millions)
                         
    Three Months Ended  
    September 27, 2008     June 28, 2008     September 29, 2007  
Operating
                        
Net earnings (loss)
   $ (397 )   $ 4     $ 60  
Less: Earnings from discontinued operations
     —       —       20  
 
                  
Earnings (loss) from continuing operations
     (397 )     4       40  
Adjustments to reconcile earnings (loss) from continuing operations to net cash provided by operating activities:
                        
Depreciation and amortization
     208       212       236  
Non-cash other charges
     480       117       27  
Share based compensation expense
     54       88       80  
Gains on sales of investments and businesses, net
     (7 )     (39 )     (5 )
Deferred income taxes
     (27 )     (192 )     (177 )
Changes in assets and liabilities, net of effects of acquisitions and dispositions:
                        
Accounts receivable
     171       246       338  
Inventories
     (183 )     183       25  
Other current assets
     76       (104 )     (557 )
Accounts payable and accrued liabilities
     271       (159 )     305  
Other assets and liabilities
     (466 )     (152 )     30  
 
                  
Net cash provided by operating activities from continuing operations
     180       204       342  
 
                  
Investing
                        
Acquisitions and investments, net
     (6 )     (34 )     (246 )
Proceeds from sales of investments and businesses
     12       51       14  
Distributions from investments
     30       81       —  
Capital expenditures
     (156 )     (120 )     (123 )
Proceeds from sales of property, plant and equipment
     116       —       50  
Proceeds from sales (purchases) of Sigma Fund investments, net
     335       156       (192 )
Purchases of short-term investments, net
     (140 )     (130 )     —  
 
                  
Net cash provided by (used for) investing activities from continuing operations
     191       4       (497 )
 
                  
Financing
                        
Net proceeds from (repayment of) commercial paper and short-term borrowings
     44       (27 )     (259 )
Repayment of debt
     —       —       5  
Issuance of common stock
     4       76       77  
Purchase of common stock
     —       —       (118 )
Payment of dividends
     (113 )     (113 )     (115 )
Distribution to discontinued operations
     (16 )     (6 )     —  
Other, net
     (2 )     —       8  
 
                  
Net cash used for financing activities from continuing operations
     (83 )     (70 )     (402 )
 
                  
Effect of exchange rate changes on cash and cash equivalents from continuing operations
     (71 )     (74 )     102  
 
                  
Net increase (decrease) in cash and cash equivalents
     217       64       (455 )
Cash and cash equivalents, beginning of period
     2,757       2,693       2,770  
 
                  
Cash and cash equivalents, end of period
   $ 2,974     $ 2,757     $ 2,315  
 
                  

 

 

Motorola, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(In millions)
                 
    Nine Months Ended  
    September 27, 2008     September 29, 2007  
Operating
                
Net loss
   $ (587 )   $ (149 )
Less: Earnings from discontinued operations
     —       67  
 
            
Loss from continuing operations
     (587 )     (216 )
Adjustments to reconcile loss from continuing operations to net cash provided by operating activities:`
                
Depreciation and amortization
     624       682  
Non-cash other charges
     596       159  
Share based compensation expense
     220       237  
Gains on sales of investments and businesses, net
     (65 )     (9 )
Deferred income taxes
     (497 )     (552 )
Changes in assets and liabilities, net of effects of acquisitions and dispositions:
                
Accounts receivable
     1,044       2,754  
Inventories
     (46 )     456  
Other current assets
     (194 )     (367 )
Accounts payable and accrued liabilities
     (524 )     (3,108 )
Other assets and liabilities
     (530 )     279  
 
            
Net cash provided by operating activities from continuing operations
     41       315  
 
            
Investing
                
Acquisitions and investments, net
     (180 )     (4,483 )
Proceeds from sales of investments and businesses
     83       75  
Distributions from investments
     112       —  
Capital expenditures
     (387 )     (393 )
Proceeds from sales of property, plant and equipment
     121       123  
Proceeds from sales of Sigma Fund investments, net
     1,122       7,154  
Purchases of short-term investments, net
     (123 )     (443 )
 
            
Net cash provided by investing activities from continuing operations
     748       2,033  
 
            
Financing
                
Repayment of commercial paper and short-term borrowings
     (37 )     (162 )
Repayment of debt
     (114 )     (167 )
Issuance of common stock
     86       289  
Purchase of common stock
     (138 )     (2,478 )
Payment of dividends
     (340 )     (354 )
Distribution to discontinued operations
     (26 )     (62 )
Other, net
     1       25  
 
            
Net cash used for financing activities from continuing operations
     (568 )     (2,909 )
 
            
Effect of exchange rate changes on cash and cash equivalents from continuing operations
     1       60  
 
            
Net increase (decrease) in cash and cash equivalents
     222       (501 )
Cash and cash equivalents, beginning of period
     2,752       2,816  
 
            
Cash and cash equivalents, end of period
   $ 2,974     $ 2,315  
 
            

 

 

Motorola, Inc. and Subsidiaries
Segment Information
(In millions)
Summarized below are the Company’s Net sales by reportable business segment for the three and nine months ended September 27, 2008 and September 29, 2007.
                         
    Net Sales  
    Three Months Ended     Three Months Ended     % Change from  
    September 27, 2008     September 29, 2007     2007  
Mobile Devices
   $ 3,116     $ 4,496       -31 %
Home and Networks Mobility
     2,369       2,389       -1 %
Enterprise Mobility Solutions
     2,030       1,954       4 %
 
                  
Segment Totals
     7,515       8,839       -15 %
Other and Eliminations
     (35 )     (28 )     25 %
 
                  
Company Totals
   $ 7,480     $ 8,811       -15 %
 
                  
 
    Net Sales  
    Nine Months Ended     Nine Months Ended     % Change from  
    September 27, 2008     September 29, 2007     2007  
Mobile Devices
   $ 9,749     $ 14,177       -31 %
Home and Networks Mobility
     7,490       7,290       3 %
Enterprise Mobility Solutions
     5,878       5,591       5 %
 
                  
Segment Totals
     23,117       27,058       -15 %
Other and Eliminations
     (107 )     (82 )     30 %
 
                  
Company Totals
   $ 23,010     $ 26,976       -15 %
 
                  

 

 

Motorola, Inc. and Subsidiaries
Segment Information
(In millions)
Summarized below are the Company’s Operating earnings (loss) by reportable business segment for the three and nine months ended September 27, 2008 and September 29, 2007.
                 
    Operating Earnings (Loss)  
    Three Months Ended     Three Months Ended  
    September 27, 2008     September 29, 2007  
Mobile Devices
   $ (840 )   $ (248 )
Home and Networks Mobility
     263       159  
Enterprise Mobility Solutions
     403       328  
 
            
Segment Totals
     (174 )     239  
Other and Eliminations
     (278 )     (249 )
 
            
Company Totals
   $ (452 )   $ (10 )
 
            
 
    Operating Earnings (Loss)  
    Nine Months Ended     Nine Months Ended  
    September 27, 2008     September 29, 2007  
Mobile Devices
   $ (1,604 )   $ (813 )
Home and Networks Mobility
     661       517  
Enterprise Mobility Solutions
     1,030       762  
 
            
Segment Totals
     87       466  
Other and Eliminations
     (803 )     (1,000 )
 
            
Company Totals
   $ (716 )   $ (534 )
 
            

 

 

Motorola, Inc. and Subsidiaries
Financial Ratios Definitions
Net Cash
Net Cash = Total cash* - Total debt**
     
*
  Total cash = Cash and cash equivalents + Sigma Fund (current and non-current) + Short-term investments
**
  Total debt = Notes payable and current portion of long-term debt + Long-term Debt
Cash Conversion Cycle
Cash Conversion Cycle = DSO + DIO — DPO
Days sales outstanding (DSO) = (Accounts receivable + Long-term receivables) / (Three months of Net sales / 90)
Days sales in inventory (DSI) = Inventory / (Three months of Cost of sales / 90)
Days payable outstanding (DPO) = Accounts payable / (Three months of Cost of sales / 90)
Return on Invested Capital (ROIC)
     
   Rolling ROIC =
  (12 mth rolling Operating earnings (loss) excluding highlighted items and including Foreign currency gain/(loss)) tax affected
 
   
 
  4 quarter average of (Stockholders’ equity + Total debt* - Excess cash**)
     
* Total debt =
  Notes payable and current portion of long-term debt + Long-term Debt
** Excess cash =
  Rolling 4 quarter average of (Cash and cash equivalents + Sigma Fund (current and non-current) + Short-term investments) - 5% of rolling Net sales